Oil is everywhere: naphtha in the Bible, and alkylate on Amazon

It might be the most interesting thing I’ve learned in 2.5 years of covering energy. Oh, sure, there’s plenty of drama every time the nation’s largest economy, California, goes into theatrics over gasoline supply. It’s still a marvel how a pipeline can keep gasoline and diesel separate with nothing more than a little tweak in pressure. And it seems like every time someone sneezes too loud, the price of gasoline in Chicago goes up by 5 cents.

Then someone dropped “mouse milk” on me.

It’s what they call alkylate, the versatile blendstock that puts the octane in your high-octane gasoline and gets the RVP down to those low summer levels the regulators love so much. It’s the get-‘er-done component for summer blending. If a batch of components is added to a batch of gasoline, odds are good that 80 percent of those components are alkylate, one longtime refined products trader said.

It’s called “mouse milk” because it gets so much done, just like the lubricant Mouse Milk that will free a rusty screw and that you can buy on Amazon for $9.91. It might have been called WD-40, but that is what many in the trade like to call naphtha. That’s another versatile blendstock that’s also a feedstock and that has the added luster of a significant draw in the petrochemical industry. (More on naphtha in an interesting side note later. You’ll want to read that far. It will be good for your soul.)

The versatility of alkylate is what drove it earlier this summer to a record 71 cents over the underlying pipeline gasoline contract. And at one point, alkylate was priced just 2 cents under reformate. That’s even though reformate is at 100 octane and alkylate is just 93. That’s even though reformate is at 1 RVP and alkylate at 5.5.

If alkylate is the mechanic’s friend, then reformate is the miracle drug he takes for his gout. Yet alkylate was rivaling reformate in price. It’s largely because alkylate has fewer olefins and can be used in more kinds of gasoline. Voila, versatility. And as much as it pains me to mention anything to do with the St. Louis Cardinals, alkylate is the Jose Oquendo of the gasoline world. He played every position, including catcher. He probably used Mouse Milk on the deck out back.

Now alkylate is losing some of that shine. It was heard dealt Monday night at 45 cents over gasoline, or 26 cents off its high this year. Four or maybe six barges full of 50,000 barrels of alkylate each were heard on offer, market sources said. The prediction is that it will drop again today. Word is the producers that have it need to get it off the books for taxes and they need to secure a strong underlying price in summer-RVP gasoline before RVP levels in the Gulf Coast market shift September 4. Additionally, NYMEX RBOB, the foundation for nearly all US refined products, looks nearly 20 cents cheaper headed into September. It all points to “sell.”

But those who buy it aren’t going to have to worry about how they’ll use it.

Squeak, squeak.

Now on to naphtha. It’s sort of in the Bible. It might be the only petroleum product in the Bible. Catholics consider the two Maccabees texts to be a canonical part of the Bible, and the 1611 King James version actually included those texts. Second Maccabees 1:36 makes mention of “naphthar” as a miraculously flammable liquid. Later in Maccabees, petroleum is used to burn people alive, but we are not sure we can pin that one on naphtha. We can confirm that naphtha is flammable, though.

US Marketscan provides you with a daily market overview of the major refined products in the United States delivered via e-mail. It carries spot prices for all key products traded in the US market. Gasoline, heating oil, jet fuel, residual fuel and naphtha prices are listed for the Atlantic Coast, Gulf Coast, Group 3, Chicago and West Coast markets. Each issue also includes insightful market commentary.

AUTHOR BIO

Jeffrey Bair,
Reporter

Jeffrey Bair has been S&P Global Platts’ managing editor for gasoline and other light ends for three years and has been with the company for five years, following a career in newspapers and magazine writing. He is a graduate of West Virginia University.

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Comments

No chance we will run out of oil. The planet produces it faster than we take it. Even now. The problem has a solution. If people do not clean up emissions then the planet (the atmosphere) kills the people.

It has been there for centuries. First Platts blogger was Marco Polo, with its post on Azerbaijan’s oil (Azeri Light, maybe?):
‘Near the Georgian border there is a spring from which gushes a stream of oil, in such abundance that a hundred ships may load there at once. This oil is not good to eat; but it is good for burning and as a salve for men and camels affected with itch or scab. Men come from a long distance to fetch this oil, and in all the neighborhood no other oil is burnt but this.’

Gasoline glut will probably be sustained as long as crude is cheap. Oil really is everywhere and so is the price. Eventually though, sneezing won’t do anything for the price when we run out of oil. Check out my oil analysis blog at http://www.blackgolddisease.com